Tesla and Microsoft Earnings: What’s Next for Big Tech? 

Big tech earnings are on the way. Tesla and Microsoft will take the spotlight, reporting their financials on Wednesday, January 29, after the closing bell.  

Both reports are of high importance due to their impact on each company’s stock performance and the overall market sentiment.  

Tesla Earnings: What Investors Want to See  

Tesla is expected to release Q4 2024 earnings with a forecasted revenue of $27.17 billion and an adjusted net income of around $2.7 billion, leading to an EPS estimate of $0.74. This would represent an 8.1% year-on-year increase in revenue, albeit a modest growth rate amid increasing competition and market pressures. ⁽¹⁾  

In Q4 2024, Tesla hit record production levels. They delivered over 495,000 vehicles but fell short of its 500,000 deliveries target. The company also reported its first annual decline in vehicle deliveries, adding complexity to the earnings report. ⁽²⁾  

Tesla implemented year-end incentives and discounts to boost sales, particularly on Models Y and S. While these strategies may have increased sales volume, they could exert pressure on profit margins. Tesla’s gross margin is projected to be around 18.9%, down from 20.1% in the previous quarter. ⁽³⁾  

Investors are closely watching Tesla’s plans for an affordable EV model, expected to drive a 30% delivery increase in 2025 after a year of declining sales amid rising competition and aging products. Updates on Tesla’s autonomous driving technology and the Optimus humanoid robot are also highly anticipated, as these innovations are critical to its growth and market position. ⁽⁴⁾  

Tesla is expected to report a solid financial performance for the fourth quarter. Investors will closely analyze delivery numbers, profit margins, and strategic initiatives to assess the company’s future growth trajectory and market position.  

Microsoft Earnings: Will Their AI Ambitions Pay Off?  

Microsoft is set to release its fiscal Q2 2025 earnings report with Wall Street analysts anticipating an EPS of $3.13, marking a 6.8% increase from the same quarter last year. Revenue is projected to reach $68.92 billion, reflecting an 11% year-over-year growth. ⁽⁵⁾  

The Intelligent Cloud segment, which includes Azure, is a major driver of Microsoft’s expected growth, with revenue projected to reach $25.76 billion, reflecting a 20% increase from last year. Analysts, including those from Jefferies, are especially optimistic, predicting a 32% year-over-year growth for Azure’s cloud division. ⁽⁶⁾  

However, Microsoft faces challenges due to its large investments in artificial intelligence (AI) and data centers. The company has committed billions to AI development, but these investments have not yet delivered immediate returns, leaving investors eager to see how they will impact profitability in the future. ⁽⁷⁾  

Moreover, Microsoft is expected to incur an impairment charge of $800 million due to its investment in General Motors’ Cruise robotaxi business. This charge is expected to lower the company’s earnings per share (EPS) by around 9 cents in the second quarter. ⁽⁸⁾  

While Microsoft’s Q2 2025 earnings are projected to show strong growth, particularly in its cloud services, the company will need to address investor concerns regarding its AI investments. 

Sources: ⁽¹⁾ ⁽²⁾ ⁽⁵⁾ ⁽⁶⁾ Investopedia, ⁽³⁾ ⁽⁴⁾ Nasdaq, ⁽⁷⁾ ⁽⁸⁾ Marketwatch 

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